I am writing to you today about the serious budgetary challenges our University community is facing. Conversations about the budget are not always easy ones to have, but we all need to understand the subject in order to respond appropriately. As more information becomes available, I will share it with you in a timely fashion.
Post-secondary institutions in this province and country can no longer sustain their operations within the current funding model. Nationally, universities have been forced in recent years to cut budgets at the expense of essential programs and services. In Manitoba, many years of low provincial grant funding and frozen or controlled tuition rates have resulted in severe stresses on the capacity of our post-secondary institutions to deliver on their mandates. At the University of Manitoba in particular, the financial demands associated with operating our institution have outpaced the growth of our resources. Put bluntly, the funding model in place does not enable the University to fully support the outcomes our students, staff and faculty are capable of achieving for themselves and, ultimately, for the betterment of Manitoba. As we advocate for changes to the model and improved funding, we are at the same time faced with the immediate prospect of balancing the budget under current circumstances. Together we need to find ways to better align our expenses with our revenues while maintaining our commitment to our institutional priorities. This will be the focus of our work as we prepare a balanced budget for 2015/2016.
For more than a decade, our funding on a per student basis has been lower than the average for research-intensive universities in the rest of the country. Our tuition revenues are the third lowest in Canada. This is a problem. Although fees are no longer frozen, provincial legislation permits them to move up only at the rate of inflation, and from a low starting point. Deferred maintenance on our inventory of classrooms, research labs, buildings and common spaces is a pressing need. These pressures combined have meant that we have fewer dollars available to meet our growing needs—needs that have accumulated into pressing costs that cannot be ignored any longer.
Over the last number of years, we sought to mitigate the impacts of these financial pressures through a number of initiatives aimed at improving services, streamlining processes, strategically managing our enrolment and simplifying our organizational structure for the benefit of staff and students. While successful in realizing considerable improvements and efficiencies, these efforts are not sufficient. We must do more to maintain our level of excellence in a way that is sustainable moving forward.
As with most other institutions, the largest expenditure we face is salaries. We need to ensure we offer competitive compensation packages in order to attract and retain the best people. At the same time, the basic facilities and infrastructure that support the University must not be neglected. We must provide modern, properly equipped classrooms, laboratories and research spaces. Other rising costs include energy and paper costs, computers, software, file storage and e-subscriptions in the library. We must also promote the University to the wider community to attract students, faculty and donor support. Unfortunately, all these costs, from salaries to equipment, continue to rise at rates that have not been matched by the combined funding we receive from the government and tuition fees.
So what can and will we do?
Although we anticipate over the next few years a considerable gap between funding and a simple extrapolation of likely expenditures, we have chosen to avoid a strategy of across the board budget cuts. We don’t think that’s the best way to serve the needs of the University. We want to weigh carefully and understand the impact of reductions in different units in order to make spending cuts—which we estimate will be on average 4 per cent across the University—in a way that will preserve the fabric of the University and enable us to continue moving forward. These decisions will be made through consideration of unit and faculty plans and priorities as well as those of the University as a whole.
It’s important for people in both academic and support units to get involved in the process and provide their best ideas from their knowledge of and experience with different areas of the University. The changes we need to make will not best be determined centrally. All of us must be prudent and find things that we can do differently. We can move forward by looking at the major aspects of the way we operate. We can look in every area and consider several questions: Are we delivering those programs and services as effectively as we can? Are we using best practices in all of those places? Should we still be offering these programs and services? How do we keep moving ahead as an institution to support the activities and initiatives that we think are our highest priorities now? The answers to those questions will guide budget preparation.
We’ve started this discussion by asking the heads of all academic and administrative units to make budget recommendations assuming there will be reductions based on available information. Over the course of planning, the estimated financial position is revised as new information becomes available, until the announcement of the provincial operating grant in March or April. At this point, the draft operating budget is finalized and submitted to the Board of Governors.
Take confidence in the fact that over a long period of time this University has carefully managed its money. We are required by legislation to put forth a balanced budget and the University has put in place and achieved this year after year. We have handled the fluctuations in markets that have so radically affected pension plans in other places. We have managed all of the financial demands the University has faced to this point. While difficult, these efforts will ensure we continue to do so.
On behalf of my colleagues, Vice-President (Academic) and Provost Joanne Keselman, Vice-President (Research) Digvir Jayas, Vice-President (External) John Kearsey and Vice-President (Administration) Paul Kochan, I want to thank all members of the University community for your commitment to this University’s core work in teaching and learning, discovery and engagement. As I’ve said before, the work we do here builds better futures for our students, faculty, staff and community. Together, we will continue in this worthwhile endeavour.
We have developed a dedicated webpage that will be a comprehensive source of information regarding this process. I have already been asked a number of questions. I have posted videos on this site in response. This page will be updated as information becomes available. Your questions and comments are welcome and will be addressed here.
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